Self-cert lender hits back at FCA

Controversial self-cert lender selfcert.co.uk has hit back at the Financial Conduct Authority after the regulator urged consumers to be wary of dealing with the firm.

Selfcert.co.uk, which claims it has had to suspend lending due to high demand, is based in Prague and is doing business in the UK by using the Electronic Commerce Directive.

On 27 January, the regulator said self-cert loans had “caused harm to consumers in the past”, arguing this was the reason it decided to ban such loans as part of the Mortgage Market Review. They became known as ‘liar loans’ because they do not require borrowers to prove their income

It also warned customers that they would lose their UK consumer protection rights by taking out a loan from a foreign lenders, including the use of the Financial Ombudsman Service.

But Selfcert.co.uk has hit out at the FCA, arguing that borrowers should be able to make up their own mind as to whether self-cert loans are appropriate for them.

A statement on its website says: “The FCA have issued a statement about this site. Whilst we disagree with the points in it, we certainly think people should read it and decide for themselves. We are not anti-FCA in anyway and people should listen to them with an open mind.

“On the face of it they don’t actually disagree with anything we have said, they have however inferred things that aren’t true.

“When we get some time we will address these.”

However, there are doubts over selfcert.co.uk’s interpretation of the Mortgage Credit Directive and whether it can continue to offer these loans after 21 March.

The Mortgage Credit Directive is less strict on rules around creditworthiness and income verification than the MMR.

The directive merely states that the borrower’s income must be “appropriately verified, including through reference to independently verifiable documentation when necessary”, whereas the MMR explicitly states “a firm must not accept self-certification of income”.

Well said Michael and I agree 110%. Prime Lenders like TMB who I placed many self employed self cert clients with in the past were a fantastic lender and have far less arrears on their loan book than full status lenders. Only when greed took over and common sense vanished did we start seeing the emergence of employed ‘self- cert’ and even worse heavy adverse employed self cert with unlimited defaults,CCJ’s or mortgage arrears (anyone remember SPML, Mortgages Plc) did the entire market go pear shaped. Self-Cert has its place for legitimate self employed clients with a successful trading history and a track record of a successful business. After all if someone has run a successful business for a decade, how are they perceived as a greater risk than an employed person who has been in their existing job for less than 3 months or continuous employment for less than a year who could be fired or made redundant at any point???!! The FCA should wake up and then there wouldn’t be 100,000’s of self employed clients stuck on lender svr or stuck on retention products!!

How very interesting there was no comment made of the huge numbers of people that benefited greatly from self-cert and indeed how the credit risk performance exceeded a significant percentage of ‘non-liar’ full status loans. The FCA would have you believe that all S/C loans went into default and resulted in possession & loan losses… Complete nonsense.